What is Occupational Maternity Pay (OMP)?
Occupational maternity pay (OMP), sometimes known as enhanced maternity pay, is where an employer tops up an employee's pay to more than the statutory minimum rates governed by HMRC. This will typically be detailed in an employee's employment contract, or within a company-wide parental leave policy.
How to set up an OMP scheme on PayFit
From the left, choose Company settings then Payroll set-up.
From the Leaves section, click Edit occupational leaves.
Under the Occupational Maternity Pay (OMP) section, set the Do you want <company name> to offer employees OMP? option to Yes.
Next to How many weeks do employees have to work to be eligible for OMP? enter the number of weeks an employee must be with your company before they're eligible for OMP.
From the OMP calculation method drop-down, select either;
✴️ Percentage of base pay (calculated as a percentage of weekly base pay including the statutory maternity rate).
✴️ Fixed weekly amount (paid in addition to the statutory maternity rate).
Next to How would you like to display OMP and SMP on an employee's payslip?, select either;
✴️ Separate OMP and SMP (two lines on the payslip) - this option is useful to view the statutory rate.
✴️ Combine OMP and SMP (one line on the payslip)
Enter the number of weeks to be paid at the increased rate. If you pay varying rates, you can add multiple periods of OMP using the Add or Remove period buttons.
For example;
✴️ 10 weeks at 100% pay in the first period
✴️ 10 weeks at 75% pay in the second period
✴️ 10 weeks at 50% pay in the third period
Click Save details.
How to add OMP for an employee
Tip: For information on setting up statutory maternity leave, please refer to this Help Centre article. Then return here to add/adjust the OMP.
From the employee's record, click the Leaves tab.
Under the Parental leave section, from the Parental leave type drop-down, select Maternity Leave.
Click Customise maternity pay settings.
Under the Occupational maternity pay (OMP) section, next to Would you like to apply OMP?, select Yes.
If this employee's OMP scheme differs to the company policy, you can change the following settings. Otherwise, click Save.
If necessary, next to the Number weeks worked to become eligible for OMP option, you can adjust the length of service required before this employee is eligible for OMP.
From the OMP calculation method choose either;
✴️ Percentage of base pay (calculated as a percentage of weekly base pay including the statutory maternity rate).
✴️ Pay weekly up to a fixed amount (paid in addition to the statutory maternity rate).
✴️ Pay monthly up to a fixed amount (paid in addition to the statutory maternity rate calculated for the month).
If an employee is absent for the full month and you'd like to top-up the employee's pay to a percentage of their usual base salary, select Yes next to Top-up to percentage of usual monthly base pay when employee is absent for the full month?. (Please refer to the section below for an example of how this works).
This has no impact on earlier or later periods of OMP. I.e., if the employee is entitled to a set amount each week, the additional OMP paid in the month, won't be taken from a later month.
If necessary, adjust the rates, or number of weeks in each block of OMP. You can click Add period or Remove period to add or remove additional blocks of OMP at different rates.
Click Save.
Explaining the ‘top-up to monthly pay’ feature
There are different methods for paying SMP, which impacts the OMP calculation:
Daily (Calendar days) - Based on 7 days a week. A normal month is 30.42 days.
Daily (Working days) - Based on the working pattern. A normal month is 21.33 days (for a 5-day worker).
Weekly - Usually 4 or 5 weeks per month. A normal working month is 4.33 weeks.
This can mean an employee's pay while on maternity leave can be higher or lower than their normal pay, due to the number of actual days or weeks in each month.
As an example:
An employee earns £24,000 annually or £2,000 monthly.
Using calendar days, their daily rate is £24,000/365=£65.75.
Their first 12 weeks are paid at 100%.
In a 30-day month, they receive £65.75*30=£1,972.60.
In a 31-day month, they receive £65.75*31= £2,038.25
The top-up to percentage of base pay, ensures they receive £2000 instead.
This only works when the full month is topped up to a percentage. If the employee is absent for part of a month, we use the number of days or weeks that they were absent instead.